Europe’s top court, in rebuke of Hungary and Poland, says E.U. can withhold certain funds from member states that violate rule of law

The European Court of Justice decision comes after years of escalating threats between the Polish and Hungarian capitals on one side and the European Commission in Brussels on the other over the general direction of the 27-member bloc of nations.

Wednesday’s news was cheered by EU officials, anti-corruption groups and advocates for the rule of law — and disparaged by officials in Hungary and Poland.

European Commission President Ursula von der Leyen welcomed the decision. “The Commission will defend the Union’s budget against breaches of the principles of the rule of law,” she said in a tweet. “We will act with determination.”

Hungarian Justice Minister Judit Varga, however, called it “living proof that Brussels is abusing its power.” Sebastian Kaleta, Poland’s deputy minister of Justice, said that the ruling amounted to “historic blackmail.”

The ruling comes at a fraught time. Hungary is preparing for parliamentary elections in early April in which Prime Minister Viktor Orban could face his biggest opposition challenge in more than a decade.

The European Commission, the EU’s executive arm, is expected to announce in the coming weeks how it wants to proceed — an announcement that could fall into the critical phase of campaigning in Hungary. Affected areas could include infrastructure subsidies and farming funds, which are substantial in the cases of Hungary and Poland and have thus far been managed by the countries themselves.

The EU’s new instrument allows the bloc’s leadership to suspend the self-management of its subsidies by countries that do not abide by the rulings of the EU’s top court, or by countries that tolerate the misuse of EU funds.

In both Poland and in Hungary, the vast majority of people are in favor of the EU, despite their governments’ clashes with Brussels.

The European Union has already withheld some payments to Poland and Hungary from a pandemic recovery fund. Opposition parties in Hungary have campaigned on a platform to unlock those payments and restore normal relations with the EU

It was unclear Wednesday whether the European Commission would propose to trigger the new mechanism. For it to take effect, at least 15 of the 27 member states — representing about 290 million people out of the EU’s total population of over 440 million — would need to endorse its triggering.

“The court’s decision gives us ground to hope that the systemic corruption and intentional demolition of democratic checks and balances will come to an end in Hungary,” said Miklos Ligeti, legal director of Transparency International Hungary.

Orsolya Vincze, an expert at K-Monitor, a Hungarian anti-corruption group, said in a statement that the ruling will only make a difference if the European Commission “is determined to make use of it.”

Whether this happens may also depend on political factors—including Hungary and Poland’s ability to find allies.

Some countries, particularly in Western Europe, want to make the union more cohesive in terms of the core values ​​its members should uphold — democracy, human rights, the rule of law. Other countries, led by Poland and Hungary, have resisted such efforts.

One such fight has been over LGBT rights. Several Polish regions and towns have declared themselves to be “LGBT-free” zones in recent years, which prompted criticism from Western European nations, as well as EU threats to withdraw funding for those places. Numerous places backed down amid the EU threats.

Amid the mounting disagreements, Poland’s constitutional tribunal, which itself has been under scrutiny for being influenced by domestic political interests, said in a controversial ruling last year that Polish law can take precedence over decisions by the EU’s top court.

The European Parliament subsequently condemned the Polish statements and called the constitutional tribunal “a tool for legalizing the illegal activities of the authorities.”

In the face of potential financial sanctions and the current crisis in Ukraine sharpening concern about being on a direct collision course with Brussels, Poland has taken some steps toward appeasement over controversial judicial reforms.

Earlier this month Polish President Andrej Duda put forward a law to scrap the country’s “disciplinary chamber” for judges, which had been a major source of contention with the EU The European Court of Justice had previously ordered that the Polish chamber — which has the power to lift the immunity of judges and expose them to criminal procedures — be suspended, ruling that it was “not compatible” with EU law.

“We do not need a dispute with the European Commission,” Duda said as he submitted the proposal. Considering the current “threats” in Europe, Poland “needs peace,” he said.

But the president and the ruling Law and Justice party with which he is affiliated, do not see eye-to-eye on how to proceed, with Law and Justice suggesting a lesser step of removing the chamber’s license, while other ministers have slammed the move .

Following Wednesday’s ruling, Polish Justice Minister Zbigniew Ziobro tweeted, “This is a gloomy date that will be written in history textbooks, but it is not the end of the battle for Polish freedom and freedom in the EU.”

In Hungary, Varga, the justice minister, framed the EU ruling as being motivated by its upcoming referendum on so-called “child protection.” On the same day as Hungary’s April elections, voters will be asked if they support the “promotion” of content related to sexual orientation to the under 18s. It follows a law approved last year that restricted LGBT material, which was criticized by the European Union as going against its values.

“Brussels has a problem with the child protection law,” said Varga. “This is not a matter concerning rule of law.”

Noack reported from Paris, Morris from Berlin. Dariusz Kalan contributed from Warsaw.

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